State Tax Rulings
Free state tax letter rulings and advisory opinions with plain-English summaries, full citations, and the original source on every page.
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If a single-member LLC that already claims Empire Zone tax credits elects to be taxed as a subchapter S corporation, does that change how its Empire Zone benefits are calculated?
No, in general it does not. The Department concluded that the wage tax credit, EZ investment tax credit, EZ employment incentive credit, and QEZE real property and tax reduction credits all continue o…
Does a contractor running a village's waste facilities owe sales tax on the waste-disposal services it buys?
Yes. The contractor's purchases of waste-disposal (hauling) services are taxable. It isn't buying as the village's purchasing agent: it contracts and is invoiced in its own name, never identifies itse…
Did a later Department overpayment notice excuse JDAP's penalty for an unfiled August 2007 CRS return and unpaid gross receipts and withholding tax?
No. JDAP knew by April 2008 that its August 2007 gross receipts and withholding tax check had not been deposited but did not investigate or confirm the return and payment. A later letter showing an ov…
Are guided bus, walking, and sailing sightseeing tours taxable admissions in Florida?
The bus and sailing tours were taxable admissions because their primary purpose was sightseeing entertainment, not transportation. The public walking tour was not an admission because the operator cou…
When did the 2009 Virginia Tax Amnesty addendum say the 20% post-amnesty penalty would not apply to audit or appealed liabilities?
The addendum expanded and clarified exceptions to the 20% post-amnesty penalty. It covered qualifying first audits, repeat audits meeting sales- and use-tax compliance thresholds, liabilities in court…
My organization is a federally chartered credit union with a payroll big enough to otherwise owe New York's MCTMT. Does federal law exempt us from it?
Yes. A federal credit union with quarterly payroll expenses over $2,500 would otherwise be an "employer" subject to MCTMT under Tax Law § 800(b). But 12 U.S.C. § 1768 broadly exempts federal credit un…
Were a Shaklee distributor's commissions and member-ordering price differentials subject to New Mexico gross receipts tax even though Shaklee collected tax on the product sales?
Yes. The payments were compensation for the distributor's separate sales service, so Shaklee's collection of tax on its product sale did not make the distributor's income exempt. The Department's 22.5…
What is South Carolina's latest statewide per capita income figure used for tax incentives (per SC IL #09-19)?
$32,666. SC Information Letter #09-19 publishes the updated statewide per capita personal income figure for South Carolina — $32,666 — which the Department uses to test qualification for various South…
Could an individual claim a recycling-equipment credit passed through from an S corporation for the 2005 tax year?
No. Virginia's individual recycling-equipment credit had expired after the 2003 tax year, while legislation allowing the corporate credit to pass through to individuals applied only to tax years begin…
Had the taxpayer abandoned Virginia domicile even though he kept a Virginia home, vehicles, and business interests?
Yes. After weighing all circumstances, Virginia found that the taxpayer abandoned Virginia domicile and established domicile in another state before 2005. His other-state home, driver's license, voter…
Did a district manager's sales-force work and a veterinarian's presale presentations create Virginia corporate-income-tax nexus?
No, based on the additional evidence. The district manager's recruiting, hiring, training, and supervision supported sales solicitation, while headquarters performed the forecasting, budgeting, pricin…
Were Nepro, Jevity, Glucerna, and Ensure purchased for inmates exempt from Virginia sales and use tax as medicines or medical supplies?
Only in part. The products were not exempt merely as medicines, drugs, or dialysis supplies because food is excluded from the drug definition. Products prescribed for specific inmates and used with en…
Did torque wrenches used to install die heads before production qualify for Virginia's manufacturing exemption?
No. The torque wrenches were used before production to install die heads and incidentally to replace damaged heads, not during production or in an exempt subprocessing activity. Although essential to …
Did remotely managed servers placed with Virginia customers create sales-tax duties for an out-of-state software company?
Virginia said the facts did not clearly establish whether the company was a service provider or a lessor. As a service provider, it would owe Virginia tax on servers, software delivered on them, and o…
Were the initial card charge and annual fee for a prescription savings club subject to Virginia sales tax?
No. Members paid for a program card and annual enrollment, receiving discounts on selected prescription drugs and a 10% rebate or credit on private-label purchases. Because club membership did not ent…
Did Virginia sales tax apply to memberships offering cash-back and service-related discounts but no tangible property?
No. The memberships gave customers cash-back opportunities and discounts on healthcare, financial, personal, travel, roadside, and similar services, but did not entitle members to receive tangible per…
Did buying about 80% of an asphalt company's assets in one transaction qualify as an exempt occasional sale?
Yes. The asset purchase included the asphalt plant, construction equipment, vehicles, office property, small tools, and remaining tangible and intangible asphalt-operation assets. Although the seller …
Which charges could an interior designer treat as nontaxable services, and which charges had to enter the taxable furniture sales price?
Separately billed planning and design services were not taxable when they did not include furniture handling or sales. Rearranging a customer's existing property was also a nontaxable service when unr…
Are loan and mortgage documents securing Florida Chapter 190 community-development-district bonds subject to documentary stamp or nonrecurring intangible tax?
No. The Chapter 190 exemption covered the bonds and the loan agreement, mortgage, and security agreement arising from or securing their repayment. Enforcing lender remedies was also not taxable becaus…
Are guaranteed and non-guaranteed indoor-plant maintenance contracts taxable service warranties in Florida?
Yes. Both contract types were taxable service warranties. Pruning, rotating, watering, cleaning, and fertilizing were maintenance of taxable tangible personal property even when plant replacement was …
Could a restaurant remove meal deductions and fixed assets from an audit without records proving the deductions or prior tax payment?
No. The restaurant could not document returned, discounted, and complimentary meal deductions, so Virginia upheld an observation method that allowed 10% of reported deductions and taxed the balance. I…
Was a conservation nonprofit's sale of Florida real property to the Internal Improvement Trust Fund exempt from documentary stamp tax?
Yes. The seller qualified because it was a section 501(c)(3) nonprofit whose purpose was deemed to be preserving natural resources, and it transferred the property to the Board of Trustees of the Inte…
Could a Virginia resident defeat a 2005 assessment by claiming he had no 'Federal 26 CFR Income' without evidence contradicting IRS records?
No. Virginia starts with federal adjusted gross income and taxes a resident's included income unless a specific Virginia modification applies. The taxpayer did not deny receiving income and supplied n…
Could Virginia uphold estimated individual income tax assessments based on bank deposits when the taxpayer claimed she was not working?
Yes. Auditors subpoenaed corporate and personal bank records and found deposits from unreported sales in the taxpayer's accounts. Her W-2s, role as corporate president, and signatures on corporate ret…
Could a graphic printer remove audit sales by asserting exemptions, labor-only work, resale, or tax paid elsewhere without supporting records?
No. Virginia upheld the listed transactions because the printer produced no valid customer exemption certificates, no evidence that disputed charges were labor-only rather than part of a tangible prod…
Were federal leaking-underground-storage and storage-related taxes excluded from the Virginia taxable price of fuel?
No. The federal leaking-underground-storage and other storage-related charges were directly connected with the taxpayer's gas, diesel, and heating-fuel sales. Virginia's sales-price definition allowed…
Did a notice of intent preserve a Virginia tax appeal when the complete application was not filed within 90 days?
No. The assessments were issued April 30, 2009, making July 29 the deadline for a complete application stating all grounds and relevant facts. The taxpayer filed a notice of intent on May 28 but never…
Did tire-retreading customers need to conduct primarily retreading work to claim Virginia's industrial-processing exemption?
No primary-business test applied. Virginia policy treated persons engaged in tire recapping or retreading as industrial processors and did not require most of their overall sales to come from retreadi…
Was a fence installer a taxable retailer when it had no showroom and bought construction materials only after accepting each job?
No. A site visit showed no showroom or retail inventory; the company kept only job-specific construction materials and leftovers that were not offered to the public. Although fence sellers can be stat…
Could a software seller reduce tax on implementation fees and exempt support fees without supplying the requested records?
No. The seller claimed only 20% of implementation fees were taxable and support fees were exempt because updates arrived electronically, but it did not provide convincing evidence during the audit or …
Does Virginia's cable-system equipment exemption cover equipment used to distribute satellite television programming through wiring in apartment properties?
No. Even though the taxpayer used wiring to distribute programming within apartment properties, its systems were based on satellite reception and did not qualify as wired or land-based wireless cable …
Did a subcontractor's failure to collect sales tax on installed floating floors relieve the building contractor of tax?
No. Virginia treated the sale and installation of floating laminate floors as a retail sale. Although the subcontractor was obligated to collect sales tax, the tax was also a legal debt of the purchas…
Was an excavator used to resize firewood for a wholesale greenhouse's heating boilers exempt as agricultural or manufacturing equipment?
No. Virginia held that cutting purchased logs to fit boilers was ancillary to the greenhouse's agricultural production, not direct agricultural production. The manufacturing exemption also did not app…
Could a bakery and restaurant overturn estimated sales, purchase, and asset tax when its records and exemption certificates were incomplete?
Not on the existing record. Virginia upheld estimates where the bakery and restaurant lacked detailed sales and purchase support, rejected incomplete or questionable exemption certificates, and found …
Are a lighting-design firm's services taxable when its work is incorporated into a licensed architect's or engineer's sealed drawings?
Yes. Architectural lighting design is a taxable interior decorating and designing service under Tax Law 1105(c)(7), and none of the firm's employees are licensed architects or engineers, so the statut…
Are sales of an injectable collagen implant to medical practitioners subject to sales tax?
Yes. The collagen implant -- an injectable bovine-collagen bulking agent used to treat urinary incontinence -- is a medical/surgical supply item, taxable when bought by medical practitioners for use i…
Are a medical practice's purchases of dermal fillers (Radiesse, Restylane) subject to sales tax?
Yes. Dermal fillers such as Radiesse and Restylane are medical/surgical supply items, and supplies are taxable when bought by someone performing medical services for compensation. They don't qualify a…
What firearms and charges qualified for South Carolina's one-time 2009 Second Amendment sales-tax holiday?
Only qualifying handguns, rifles, and shotguns sold during November 27–28, 2009 were exempt. Separately sold ammunition, parts, attachments, supplies, and accessories remained taxable.
When did a buyer have to withhold South Carolina income tax from a nonresident seller of real estate under the 2009 guidance?
A buyer generally withheld on a taxable South Carolina real-property sale by a nonresident. A valid seller affidavit could establish residency, exemption, deferred gain, or a lower gain-based withhold…
Are optional, separately stated charges for a rental car company's prepaid-toll, roadside-assistance, and carbon-offset programs subject to Colorado sales or use tax?
Not taxable. A rental car company's optional, separately stated charges for prepaid-toll, roadside-assistance, and carbon-offset programs are NOT subject to Colorado sales or use tax. Each is a servic…
Could a New Mexico construction contractor exclude client reimbursements for materials and services as amounts received through a disclosed agency?
No. The contractor bought materials and services in its own name, its vendors looked to it for payment, and it did not prove authority to bind the project owners to the vendor contracts. The client's …
Which of a supermarket's products are taxable: fudge, halva, maple sugar candy, prepackaged sushi, or food gift baskets?
Fudge, halva, and maple sugar candy are taxable. They count as candy or confectionery, which is carved out of the food exemption (Tax Law 1115(a)(1)); selling fudge in the bakery section doesn't make …
Are a translation company's receipts for document, telephone, and on-site translation subject to sales tax?
No. Translation is a professional service that isn't one of the services New York's sales tax lists, so receipts for translating documents (delivered electronically), real-time telephone translation, …
Were lump-sum charges to firms participating in a promotional financial or legal book taxable in Florida?
Yes, when the books were delivered in Florida. The publisher provided advertising services, but the books were taxable promotional goods and the agreement did not separately state printing charges, ma…
Is providing a driver to drive the customer's own vehicle, with no vehicle supplied, a taxable transportation service?
No. Taxable transportation service (livery) requires the provider to furnish a motor vehicle with a driver. This staffing company supplies only a driver to operate the customer's own (or the customer'…
Were admissions to an event co-promoted by a county and a section 501(c)(3) foundation exempt from Florida sales tax?
No. The county and foundation split revenues, expenses, profits, and losses equally, so the county did not bear 100% of the risk and funds. The nonprofit exemption also failed because the foundation d…
Would Virginia accept delinquent resident income tax returns after federal records verified the reported income for 2001 through 2003?
Yes. Virginia initially issued statutory assessments because the residents' late returns lacked enough supporting documentation. During the appeal, the Department verified that federal returns had bee…
Were materials used in fixed church sanctuary finishes and broadcast sets exempt from Virginia sales and use tax?
No. Items fabricated and installed in fixed locations became part of real property, making the taxpayer a taxable user or consumer as a real-property contractor. The church exemption did not cover bui…
Was a corporate officer personally liable for the corporation's unpaid Virginia sales and use taxes despite claiming to be only a token officer?
Yes. The officer held three corporate offices, possessed a spreadsheet showing the Virginia tax debt, contacted the Department about a payment plan, signed a corporate return, and participated in othe…
How should a Virginia combined-return filer treat at-cost intercompany reimbursements, partnership factors, and a foreign subsidiary with a Virginia employee?
At-cost intercompany reimbursements with no gain or loss were excluded from the sales factor. The corporation had to include its proportionate shares of the factors of two partnerships where it was ge…
Was a retail tenant's storefront sign a real-property fixture rather than taxable business tangible personal property?
No. Although the sign was attached to the storefront, the lease treated signage as the tenant's property and contemplated its removal when the lease ended. The taxpayer's stated desire to remain in bu…
How should a global telemarketing company apportion direct-response receipts to a Virginia call center for BPOL tax?
Virginia upheld the general payroll-apportionment formula: worldwide receipts multiplied by Virginia call-center payroll divided by total payroll. The taxpayer could not first subtract all receipts fr…
Could a Virginia county impose BPOL tax on a Section 501(c)(6) nonprofit's dispute-resolution receipts that were not reported as unrelated business taxable income?
Not on the record presented. The county's ordinance exempted federally tax-exempt receipts of Section 501(c)(6) organizations, except receipts subject to federal tax. Because the county did not show t…
Under revised Louisiana Revenue Ruling 08-011, who earned, allocated, transferred, and risked recapture of Louisiana New Markets Tax Credits?
A QEI holder earned credits on each statutory allowance date. LLC allocations in an operating agreement were respected, earned unused credits could be transferred, and future credits required transfer…
How can taxpayers find South Carolina advisory opinions by subject (per SC IL #09-18)?
Use the index attached to SC Information Letter #09-18 to find South Carolina advisory opinions. It indexes the advisory opinions issued by the Department from 1987 through September 2009, and it expl…
How can taxpayers check whether an older South Carolina advisory opinion was modified or superseded (per SC IL #09-17)?
Use the citator attached to SC Information Letter #09-17. It helps you determine what effect newer South Carolina advisory opinions have on previously published ones — whether an opinion was modified,…
Could five simultaneously installed photovoltaic arrays sharing two inverters count as five solar systems, and how was the former Louisiana credit calculated?
Yes under the Department's immediate shared-inverter safe harbor. Each of the five photovoltaic systems and the separate solar thermal system received a refundable credit equal to 50% of its first $25…
Was an out-of-state buyer's Florida auction purchase exempt as a sale for export?
Yes. Common carriers picked up all three items at the auction site and delivered them outside Florida before the buyer took possession. The auctioneer still had to keep records proving a continuous, u…
How did Florida source customized-software and other service receipts for the corporate income tax sales factor?
Customized-software receipts were sourced to the state where the customization work occurred. Receipts from the taxpayer's other services were sourced to the customer's location. The taxpayer could no…
Did a related company's rent-free occupancy create a taxable implied lease of Florida real property?
Yes. The operator occupied all of the related landowner's property, the loan documents treated it as the sole tenant, and its distributions indirectly funded the landowner's mortgage, taxes, insurance…
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